CFO Awards 2017: Today’s CFOs Focus More on Strategy

Custom Content from the Los Angeles Business Journal

A new Grant Thornton LLP survey has found that chief financial officers (CFOs) are spending more than a third of their time as strategic advisers, taking on roles well beyond traditional financial management.

The 2017 CFO Survey also found that 40 percent of CFOs identify strategic planning as one of their top priorities – only slightly behind more expected activities like increasing cash flow (45 percent) and reducing costs (41 percent).

“Modern CFOs must act as both strategists and scorekeepers,” said Srikant Sastry, national managing principal of Advisory Services for Grant Thornton LLP. “But focusing on strategic planning is a paradox; it can reflect either a cost or an opportunity.”

Sastry points to the example of CFOs getting involved with operating metrics – a step beyond the financial metrics they have traditionally used. “Whether this is an efficient use of their time or an imposition depends on the availability of tools such as analytics platforms, and on the CFO’s flexibility to do ‘what-if’ analyses,” he explained.

Sastry stresses that finding the right balance starts with defining key business metrics and then tying these metrics to how they affect or drive bottom-line performance.

Risk is a top priority

Grant Thornton’s survey shows that managing risk is top of mind for CFOs, with two-thirds of respondents reporting that they want to reconcile their risk management strategy with their business strategy. Additionally, 70 percent expect to increase their use of analytics to measure risk management in the next two years.

“CFOs are clearly losing sleep over risk,” says Brad Preber, national managing partner of Business Risk Services for Grant Thornton. “Slightly less than 60 percent of CFOs see a strong need to manage risk as it affects operational costs and workforce management, followed by 51 percent who prioritize managing risk in order to vet growth opportunities, and 49 percent who prioritize it in order to manage cyber threats.”

Technology posing challenges

The survey also finds that CFOs want to focus on digital transformation initiatives, but cannot do so because they are spending so much money maintaining aging technology. Their three top barriers for future technology growth include managing costs (51 percent), maintenance of legacy systems (41 percent) and seamless business integration (40 percent.)

“The simple truth is that CFOs face an uphill battle when it to comes to adopting technologies like cloud computing and advanced analytics,” said Mike Ward, national managing principal of Business Consulting & Technology for Grant Thornton. “And they are feeling a sense of urgency: Nearly half of survey respondents – 46 percent – believe that their IT platforms lack the ability to operate effectively and require future investment.”